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Unformatted text preview: ACC 1011 Practice Final Exam Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. ___d_ 1. Which one of the following business decisions will least likely require financial information? a. Bank of USA is reviewing a loan application from Lawn Doctor Corp. b. Lawn Doctor Corp. attempts to sell its stock to the public. c. The labor union representing Lawn Doctor employees is negotiating a pay raise for employees with the company. d. Lawn Doctor is deciding whether to wash its vans today or tomorrow. ____d 2. Which of the following would be classified as external users of financial statements? a. Stockholders and management of the company b. The controller of the company and a company's stockholders c. The company's marketing managers d. The creditors and stockholders of the company ___d_ 3. Which one of the following is least likely to be a user of financial information of a grocery store? a. Manager of the grocery store b. Supplier of milk c. Stock broker d. Customer ___b_ 4. Which financial statement would you analyze to determine if a company distributed any of its profits to its shareholders? a. Balance sheet b. Statement of retained earnings c. Income statement d. Both the balance sheet and income statement _ a ___ 5. CSX Transportation purchases many pieces of office furniture with an individual cost below $200 each. CSX chooses to account for these expenditures as expenses when acquired rather than reporting them as property, plant, and equipment on its balance sheet. The company's accountant and independent CPA agree that no accounting principle has been violated. What accounting justification allows CSX to expense the furniture? a. Materiality b. Matching c. Conservatism d. Verifiability ____ b 6. To determine the source of a company's assets, on which financial statement will you look? a. Only the balance sheet b. Both the income statement and balance sheet c. Both the statement of retained earnings and the balance sheet d. Only the income statement ____d 7. Which one of the following is an internal event? a. A swim club pays lifeguard salaries. b. Dividends are distributed to shareholders. c. Eggs used to make omelets in a restaurant are purchased. d. Potato chips are transferred from the production line to the packaging area. ____b 8. All of the following events can be identified from standard source documents except which of the following? a. Freight charges for merchandise sold to customers b. The amount to be paid to settle a lawsuit for injury to a customer c. Wages to be paid to hourly employees d. Commissions earned by sales employees ____c 9. Which pair of accounts cause owners equity to decrease?...
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- Fall '07
- Financial Accounting